2024-004—Subrecipients Awards and Monitoring Type of Finding (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards (G) Instance of Noncompliance related to Federal Awards Funding Agency U.S. Department of Agriculture (“USDA”) Program Partnerships for Climate-Smart Commodities; Award: USDA/NR243A750004G005 (AL 10.937); Period: 11/02/2023 -11/01/2028 Questioned Costs None identified Statement of Condition The Subaward agreement needs to be clear of the type of agreement with grant number, Assistance Listing number and clear programing and financial expectations. Pass-through entities are to provide reasonable assurance that the costs of goods and services charged to federal awards are allowable and charged in accordance with the applicable regulations. During our test work over controls over sub-recipient monitoring, we noted Quivira did not have a financial monitoring tool to require the sub-recipients to provide the primary recipient with a copy of their audit report and the sub-recipient's response to any audit findings, when applicable. Note: Quivira did ask for backup documentation for all expenses Invoices and a programmatic report and documented meeting discussions about sub-recipients. The primary recipient should also follow-up on the audit findings to determine whether the sub-recipient has satisfactorily resolved audit findings. This follow-up should be performed on a timely basis. Criteria 2 CFR §200.332 requires Pass-through-Entities to: issue subawards with complete federal award identification; assess subrecipient risk; monitor programmatic and financial performance; and verify audit requirements and review reports/findings; as well as issue follow up corrective actions as applicable. Some of the specific requirements are as follows: Federal award identification including the AL #, subawards amount, type of agreement (subawards versus contract, etc.) Evaluate each subrecipient fraud risk and risk of non-compliance with the federal awards Monitor the financial and performance reports Verify if the sub-recipient is audited, if required and if they have any findings related to the subaward Effect Without complete and accurate monitoring of sub-recipient expenditures of federal funds, Quivira cannot ensure the costs of goods and services charged to federal awards are allowable and charged in accordance with the applicable regulations. When the entity does not receive and review these audit reports, it may not have complete information about weaknesses identified by the independent auditors. Cause Quivira considered the Independent Contractor agreement and the requests for reimbursement of backup documentation sufficient. Recommendation Quivira should ensure it properly monitors sub-recipients according to the requirements required by the CFR 200 identified under “Criteria”. Views of Responsible Officials and Planned Corrective Action Management agrees with the recommendation. Quivira Coalition will: Action Step Detail Date Responsible Party Update its subrecipient and contractor agreement templates to include information outlined in 2 CFR § 200.332, including more specific federal award identification. 10/31/25 Operations Director Add a clause to the subrecipient and contractor agreement templates to include a requirement to report any significant developments to Quivira Coalition. 10/31/25 Operations Director Build a procedure for evaluating a subrecipient’s fraud risk and risk of non-compliance with the federal awards (as outlined in 2 CFR § 200.332 (c)) during the grant application phase or before engaging in agreements & work with subrecipient. It will continue to follow-up annually with the recipients on fraud risk and risk of non-compliance until the end of the federal award period. 10/31/25 Operations Director; CRI Director & Grants Manager Monitor sub-recipients as required by 2 CFR 200.332(e) 1/31/2026 Operations Director If a subrecipient has significant development during the course of monitoring, institute a tailored monitoring plan as outlined in 2 CFR § 200.332 (e) & (f) and resolve any findings listed as its responsibility under 2 CFR § 200.332 (e). 10/31/25 Operations Director; CRI Director & Grants Manager
2024-001—Preparation of the Schedule of Expenditures of Federal Awards and Federal Grants Monitoring Type of Finding (E) Material Weakness in Internal Control Over Compliance of Federal Awards (H) Instance of Material Non-compliance related to Federal Awards Funding Agency U.S. Department of Agriculture (“USDA”) Major Programs Affected Beginning Farmer and Rancher Development Program; Award: BFRDP-2023-49400-40894 (AL 10.311); Period: 09/15/2023-09/14/2026 Partnerships for Climate-Smart Commodities; Award: USDA/NR243A750004G005 (AL 10.937); Period: 11/02/2023 -11/01/2028 Questioned Costs The Questioned Cost are undetermined. Management has estimated the amount for Beginning Farmer and Rancher Development Program; Award: BFRDP-2023-49400-40894 (AL 10.311) to be $42,027 and for Partnerships for Climate-Smart Commodities; USDA/NR243A750004G005 (AL 10.937) to be $33,453. Statement of Condition Quivira implemented a software system (Harvest) to track personnel time spent and expenses for federal programs for the year ended December 31, 2024, but time tracking was not at a level of detail considered sufficient for a properly functioning system of financial reporting. The billing system is not reconciled to the accounting system (QuickBooks) to ensure that all allowable costs are properly tracked, invoiced and reported. This finding appears to be a systemic issue. Also, the Schedule of Federal Awards (“SEFA”) was prepared initially by the Auditor based on revenue rather than expenses due to inconsistencies in recording in the accounting system, which appeared to be a reasonable methodology. Criteria An auditee must prepare a SEFA from its books, including required elements (Assistance Listing, award number, period, pass-through, subrecipient amounts) and maintain financial management systems that allow accurate, timely, and supported reporting (2 CFR 200.510(b); 200.302). Award financial reports (SF-425) must reconcile to the general ledger per award terms. Each grant should have its own general ledger in the accounting system, and the grants billing system should be reconciled regularly with the accounting system. Policies and procedures should be updated to ensure proper reconciliations is done. Cause Quivira has not implemented an effective monthly reconciliation of allowable costs control activity between Harvest and QuickBooks. Effect Quivira was unable to provide a SEFA and a reconciliation to the general ledger. During the audit the billing system was reconciled to the accounting system and multiple errors were discovered. A risk exists that improper tracking and documentation over federal grant awards can lead to instances of noncompliance with grant requirements and inaccurate financial information, which would be used by management, Board of Directors and grantors. Recommendation Quivira should develop and implement a consistent federal grant monitoring process and monthly reconciliation between Harvest and QuickBooks for each federal award. Also, Quivira should improve their policies and procedures by including monthly reconciliations, clearly define the allowable cost under federal rules. Revise budget, if necessary, to reallocate cost, if necessary. Quivira staff should be kept informed about all rules updates under Uniform Guidance. Views of responsible officials and planned corrective actions Quivira Coalition has made efforts to fully comply with federal allowable cost rules, including implementing a compliant time and expense system, implementing a compliant accounting system, consulting with federal program officers, and requesting budget revisions when necessary. However, management agrees that despite its efforts it did not correctly attribute allowable non-personnel and personnel costs to the grants, resulting in errors on the Schedule of Expenditures of Federal Awards (SEFA). Management has analyzed the errors and determined the root causes. Management agrees that the root cause of finding 2024-001 is the discrepancy between the accounting system and time and expenses software system, and that this is material to grant management. After reconciling these discrepancies, as discussed below, management believes the estimated amount for Beginning Farmer and Rancher Development Program; Award: BFRDP - 2023 - 49400 - 40894 (AL 10.311) to be $7,002 and for Partnerships for Climate-Smart Commodities; Award: USDA/NR243A750004G005 (AL 10.937) to be $10,169. Non-Personnel Costs Discrepancies in non-personnel costs were primarily caused by human errors. Management conducted a post-audit reconciliation between the expense tracking system (Harvest) and the general ledger (QuickBooks) which identified the 2024 discrepancies, and Quivira has corrected them. Personnel Costs Discrepancies in labor costs were due to three factors: 1) Quivira Coalition personnel are paid for holidays and paid time off (PTO) and therefore personnel costs include PTO and holiday costs in QuickBooks. However, Quivira’s timekeeping system (Harvest) does not burden federal award personnel costs with PTO and holiday costs making it difficult to reconcile. 2) To allocate personnel costs to a grant, Quivira used the Harvest system. This system calculates a fixed cost rate for each person based on their total annual compensation and expected work capacity and then multiplies this fixed cost rate by the number of hours worked on each grant (as recorded in the Harvest System). However, using fixed cost rates can result in misallocation in situations where personnel work over capacity (e.g. overtime) or under capacity. The appropriate cost allocation approach for salaried employees is to allocate actual personnel costs for a task based on the percentage of total hours worked. 3) Quivira calculated personnel fringe costs based on an estimated hourly fringe rate rather than identifying and allocating actual fringe expenses from QuickBooks. To correct for this material weakness, Quivira Coalition will: Action Step Detail Date Responsible Party Develop a new, compliant method to allocate personnel costs for federal billing and reporting. Stop using the timekeeping system (Harvest) for allocation. The new method must properly reflect actual paid salaries, paid fringe, and actual time spent. 12/31/2025 Accounting Firm Update reporting process to reconcile all costs reported on the SF-425 to the general ledger (instead of the timekeeping system) using the new federal grants billing process. Keep detailed records of the reconciliation. 12/31/2025 Accounting Firm Implement a monthly reconciliation process between the time and expense system (Harvest) and the QuickBooks general ledger to reconcile all non-personnel expenses. 1/31/2026 Operations Director Document the grant management process, including new reporting processes, required reconciliations, monitoring policies, and allowable cost management to ensure consistency across the organization. 2/28/2026 Operations Director Update policies and procedures to require that expenses reported on the SEFA form come directly from the accounting system to ensure this continues. 1/31/2026 Operations Director Update policies and procedures to require an annual reconciliation between the SF-425 and SEFA reports to ensure this continues. This occurs before submitting the SEFA report. 1/31/2026 Operations Director Reconcile all grant programs active in 2024 and 2025 using updated processes and resolve any discrepancies with federal reports or billing. 2/28/2026 Initial Review - Operations Director & Grants Manager Secondary Review & Corrections (if needed) - Accounting Firm Develop a plan to ensure regular and sufficient training on Uniform Guidance tracking regulatory changes, and how to implement changes. Update policies and procedures. 11/30/2025 Operations Director & Executive Director Update policies and procedures to require an additional level of review and approval for SF-425 and SEFA reports and reconciliations for accuracy and completeness before they are submitted. 12/31/2025 Operations Director with final approval from the Executive Director
2024-002—SUSPENSION AND DEBARMENT Type of Finding (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards (G) Instance of Noncompliance related to Federal Awards Funding Agency U.S. Department of Agriculture (“USDA”) Programs Beginning Farmer and Rancher Development Program; Award: BFRDP-2023-49400-40894 (AL 10.311); Period: 09/15/2023-09/14/2026 Partnerships for Climate-Smart Commodities; Award: USDA/NR243A750004G005 (AL 10.937); Period: 11/02/2023 -11/01/2028 Questioned Costs None identified Statement of Condition Quivira does not have a process to or adequately document its review process to confirm vendor suspension and debarment status prior to entering into federally funded transactions. Also, the policies and procedures do not have clear procedure of vendor checking for debarment and suspension. Quivira has checked three entities during the Audit with no negative results. Criteria Non-Federal entities must ensure covered transactions are not with excluded parties (2 CFR Part 180, e.g., §180.300) as required by 2 CFR §200.214. Verification may be via SAM.gov, certification, or contract clause, with documentation retained. Cause Procurement policy lacks clear Suspension and Debarment steps and required documentation; staff is not trained on timing/evidence. Effect or Potential Effect Not adequately verifying suspension and debarment could result in Quivira engaging federally funded vendors who are prohibited from participating in federal programs, potentially causing disallowed costs, repayment obligations, or the loss of future federal funding. Recommendation We recommend Quivira: Update procurement policies promptly to fully comply with all applicable federal procurement guidelines. Clearly define the federal small purchase threshold and include procedures for obtaining price quotations. Establish and implement documented processes for verifying and recording suspension and debarment checks before engaging in covered transactions. Provide ongoing training for procurement staff to ensure proper understanding and consistent application of federal procurement standards, specifically regarding small purchase procedures and suspension/debarment checks. Views of Responsible Officials and Planned Corrective Action Management agrees with the recommendation. To address this significant deficiency, Quivira Coalition will: Action Step Detail Date Responsible Party Update its Procurement Policy to fully comply with all applicable federal procurement guidelines including clearly defining the federal small purchase threshold, updating procedures for obtaining price quotation, adding procedures for checking suspension & debarment and documenting results before engaging in transactions. 10/31/25 Drafting: Operations Director & Executive Director Review Changes: Board of Directors financial committee Approval: Board of Directors Implement the procedure to check suspension or debarment with potential subrecipients, contractors and other persons related to covered transactions before entering into a covered transaction by the methods given in 2 CFR § 180.300. The documentation showing the check or certification that a person is not suspended or debarred will be saved in the grants and financial files. Once it has been confirmed the person is not suspended or debarred, then the transaction may be entered into. 10/31/25 Operations Director & Executive Director Conduct an annual training for all staff currently involved with government awards including programmatic staff plus financial and grant management staff on the updated procurement policies with special focus on small purchase procedures and suspension/debarment checks. It will also build into its grant lifecycle regular review of these procedures during application/negotiation, implementation and reporting phases. 11/30/25 Operations Director and Grants manager Incorporate a semi-annual review of procurement files to ensure compliance with the new procedures. Findings from these reviews will be reported to management. 1/31/26 Operations Director
2024-003—REPORTING Type of Finding (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards (G) Instance of Noncompliance related to Federal Awards Funding Agency U.S. Department of Agriculture (“USDA”) Programs Beginning Farmer and Rancher Development Program; Award: BFRDP-2023-49400-40894 (AL 10.311); Period: 09/15/2023-09/14/2026 Partnerships for Climate-Smart Commodities; Award: USDA/NR243A750004G005 (AL 10.937); Period: 11/02/2023 -11/01/2028 Questioned Costs None identified Statement of Condition During our testing of the Reporting Compliance requirement for the major federal programs, we noted the SF-425 reports were generated based on Harvest billing/tracking system and not properly reconciled to the general ledger (QuickBooks). In addition, some other minor clerical errors were also present. Criteria In accordance with 2 CFR 200.327 (Financial Reporting) and award terms requiring SF-425 is required to be submitted for the Beginning Farmer and Rancher Development Program and Partnerships for Climate-Smart Commodities program. Recipients use the SF-425 as a standardized format to report expenditures under Federal awards, as well as, when applicable, cash status. The report should be reconciled to the general ledger on same basis as marked on the SF-425. Also, the reports need to be reviewed for accuracy and completeness. Cause Reports were submitted based on the tracking/billing system (Harvest) and not reconciled to QuickBooks. Effect Reports could have errors and jeopardize future federal funding. Recommendation Quivira should implement procedures and controls to ensure that the federal reports are reconciled, reviewed for accuracy and completeness before submission. Views of Responsible Officials and Planned Corrective Action Management agrees that, despite regular reviews of SF-425 reports for accuracy and completeness, current steps were not adequate to ensure federal reports are reconciled and reviewed for accuracy and completeness before submission. This finding is directly connected to 2024-001, and the same action steps will address this finding. To correct for this significant deficiency, Quivira Coalition will:Action Step Detail Date Responsible Party Develop a new, compliant method to allocate personnel costs for federal billing and reporting. Stop using the timekeeping system (Harvest) for allocation. The new method must properly reflect actual paid salaries, paid fringe, and actual time spent. 12/31/2025 Accounting Firm Update reporting process to reconcile all costs reported on the SF-425 to the general ledger (instead of the timekeeping system) using the new federal grants billing process. Keep detailed records of the reconciliation. 12/31/2025 Accounting Firm Implement a monthly reconciliation process between the time and expense system (Harvest) and the QuickBooks general ledger to reconcile all non-personnel expenses. 1/30/2026 Operations Director Document the grant management process, including new reporting processes, required reconciliations, monitoring policies, and allowable cost management to ensure consistency across the organization. 2/28/2026 Operations Director Update policies and procedures to require that expenses reported on the SEFA form come directly from the accounting system to ensure this continues. 1/30/2026 Operations Director Update policies and procedures to require an annual reconciliation between the SF-425 and SEFA reports to ensure this continues. This occurs before submitting the SEFA report. 1/30/2026 Operations Director Reconcile all grant programs active in 2024 using updated processes and resolve any discrepancies with federal reports or billing. 1/30/2026 Initial Review - Operations Director & Grants Manager Secondary Review & Corrections (if needed) - Accounting Firm Develop a plan to ensure regular and sufficient training on Uniform Guidance tracking regulatory changes, and how to implement changes. Update policies and procedures. 11/30/2025 Operations Director & Executive Director Update policies and procedures to require an additional level of review and approval for SF-425 and SEFA reports and reconciliations for accuracy and completeness before they are submitted. 12/31/2025 Operations Director with final approval from the Executive Director